nordstrom means business

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36 footwearplusmagazine.com FEBRUARY 2008 Shoppers love it. Brands want to be in it. Here, a look at how the better-grade chain continues to raise the bar for department store footwear retailing. By Leslie Shiers FitFlops promise a workout as you walk. NordStrom meaNS BuSiNeSS sk any new fashion footwear brand where it’s targeting distribution, and chances are the first response you’ll get is “Nordstrom.” Likewise, shoppers often cite Nordstrom as their go-to store when looking for a great selection of luxe yet accessible shoes. Since its shoe-store beginnings more than a century ago, the better-grade department store chain has managed to add diverse fashion categories while maintaining a focus on its customers’ footwear desires—so much so that it continually sets the gold standard for department stores in the eyes of industry members and onlookers alike. “Brand legacy means a lot in the retail space,” notes U.S. retail analyst Daniela Nedialkova of Atlantic Equities in London. “Nordstrom started out as a specialty footwear store and that heritage is remembered.” Since 1901, when it launched as the Wallin & Nordstrom shoe store in Seattle, Nordstrom has grown to more than 100 full-line locations—not to mention its offshoots, including an e-commerce site, 50 Nordstrom Rack locations and a standalone shoe store. “In order to be successful we’ve had to evolve, just as fashion evolves,” says Michael Boyd, spokesperson for Seattle-based Nordstrom Inc. But despite its growth over the last century, the chain has maintained its original philosophy on providing exceptional service, selection and quality. It also continues to define itself as a fashion specialty retailer, and its footwear section has always been a highlight thanks to a solid mix of styles presented in an upscale but inviting atmosphere, with top-notch customer service backing it up. And from a brand’s perspective, that successful execution of merchandising and support makes it an unsurpassed retail platform. Selection and Setting “When I go out and sell my brand, the first thing that comes to mind is where would I like to shop,” says Douglas Segal, North American sales manager for Spanish brand Camper. “The nice thing about shopping at Nordstrom is you’re not shopping there strictly on price; you’re shopping based on the experience.” According to Boyd, Nordstrom prides itself on making shopping easy for its customers, and striving to improve upon that is a continuous goal. “We want to be a superior multi- channel fashion retailer and deliver a seamless experience,” he reports. That starts with the selection of products. “The footwear selection is unique from other department stores, with both designer brands and small, relatively unknown but trendy and interesting brands in the mix,” Nedialkova explains, noting the boutique-like selection lends weight to the chain’s self-defined specialty-store status. “The variety is not as wide as in a typical department store but feels more carefully selected.” Like the other “Big 6” luxury department stores (Saks, Bloomingdale’s, Neiman Marcus, Bergdorf Goodman and Barney’s), Nordstrom focuses on fashion, but it carries more categories of footwear than the others, says Greg Tunney, CEO of Pickerington, OH-based R.G. Barry Corp., who cites the out- door and young-trend segments as examples. But it doesn’t get too mainstream either, carefully navigating the fine line between luxe and mass. “Somehow, Nordstrom has been able to keep an exclusivity but have a broader scope,” Tunney explains. The company’s goal is to provide customers with the best selection of designer, luxury and quality fashion brands avail- able. “As a fashion retailer, we believe it’s our job to edit,” Boyd says. Many footwear execs agree that the fact that the A

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A look at the much-loved, privately held specialty department store — why consumers want to shop its stores, and why fashion brands aim to land on its shelves

TRANSCRIPT

Page 1: Nordstrom Means Business

3 6 f o o t w e a r p l u s m a g a z i n e . c o m • F E B R U A R Y 2 0 0 8

Shoppers love it. Brands want to be in it.

Here, a look at how the better-grade chain

continues to raise the bar for department

store footwear retailing. By Leslie Shiers

FitFlops promise a workout as you walk.

NordStrom meaNS

BuSiNeSS

sk any new fashion footwear brand where it’s targeting distribution, and chances are the first response you’ll get is “Nordstrom.” Likewise, shoppers often cite Nordstrom as their go-to

store when looking for a great selection of luxe yet accessible shoes. Since its shoe-store beginnings more than a century ago, the better-grade department store chain has managed to add diverse fashion categories while maintaining a focus on its customers’ footwear desires—so much so that it continually sets the gold standard for department stores in the eyes of industry members and onlookers alike.

“Brand legacy means a lot in the retail space,” notes U.S. retail analyst Daniela Nedialkova of Atlantic Equities in London. “Nordstrom started out as a specialty footwear store and that heritage is remembered.” Since 1901, when it launched as the Wallin & Nordstrom shoe store in Seattle, Nordstrom has grown to more than 100 full-line locations—not to mention its offshoots, including an e-commerce site, 50 Nordstrom Rack locations and a standalone shoe store.

“In order to be successful we’ve had to evolve, just as fashion evolves,” says Michael Boyd, spokesperson for Seattle-based Nordstrom Inc. But despite its growth over the last century, the chain has maintained its original philosophy on providing exceptional service, selection and quality. It also continues to define itself as a fashion specialty retailer, and its footwear section has always been a highlight thanks to a solid mix of styles presented in an upscale but inviting atmosphere, with top-notch customer service backing it up. And from a brand’s perspective, that successful execution of merchandising and support makes it an unsurpassed retail platform.

Selection and Setting“When I go out and sell my brand, the first thing that comes to mind is where would I like to shop,” says Douglas Segal, North American sales manager for Spanish brand Camper. “The nice thing about shopping at Nordstrom is you’re not shopping there strictly on price; you’re shopping based on the experience.”

According to Boyd, Nordstrom prides itself on making shopping easy for its customers, and striving to improve upon that is a continuous goal. “We want to be a superior multi- channel fashion retailer and deliver a seamless experience,” he reports.

That starts with the selection of products. “The footwear selection is unique from other department stores, with both designer brands and small, relatively unknown but trendy and interesting brands in the mix,” Nedialkova explains, noting the boutique-like selection lends weight to the chain’s self-defined specialty-store status. “The variety is not as wide as in a typical department store but feels more carefully selected.”

Like the other “Big 6” luxury department stores (Saks, Bloomingdale’s, Neiman Marcus, Bergdorf Goodman and Barney’s), Nordstrom focuses on fashion, but it carries more categories of footwear than the others, says Greg Tunney, CEO of Pickerington, OH-based R.G. Barry Corp., who cites the out-door and young-trend segments as examples. But it doesn’t get too mainstream either, carefully navigating the fine line between luxe and mass. “Somehow, Nordstrom has been able to keep an exclusivity but have a broader scope,” Tunney explains.

The company’s goal is to provide customers with the best selection of designer, luxury and quality fashion brands avail-able. “As a fashion retailer, we believe it’s our job to edit,” Boyd says. Many footwear execs agree that the fact that the

A

Page 2: Nordstrom Means Business

3 8 f o o t w e a r p l u s m a g a z i n e . c o m • F E B R U A R Y 2 0 0 8

chain has regional rather than national buyers helps each hone in on what their particular customers are after. Plus, they have a knack for pinpointing each brand’s specialty, says Segal, noting Nordstrom buyers come to market with an open mind. “There’s a difference between being a buyer and a number-cruncher,” he says. “I believe they are buyers. They are looking at the product, the mix and how it’s going to look on their floor.”

Faryl Robin Morse, founder and designer of New York-based Farylrobin, agrees Nordstrom’s buyers are product people first. “They not only understand trends but product,” she states. Morse says Nordstrom was the first department store to take a chance on her brand, which (when it debuted) was new in the sense that it offered a trend-driven look that didn’t fit into the traditional junior or salon segments.

In addition to blazing trails for new categories, Boyd notes the chain has recently enhanced its wom-en’s designer collection, bringing in more styles from highly desired American and European labels. Roberto Angiolucci, president of C.C. Calzature Limited, parent company of the New York-based Claudia Ciuti brand, says the store offers some “corporate” vendors, but also looks to other designers for newness. Last June, the company strengthened Jeffrey Kalinsky’s role as director of designer mer-chandising to further push that envelope. Kalinsky, founder of the Jeffrey luxury boutiques in New York and Atlanta, is working with Jack Minuk, Nordstrom’s executive vice president and general merchandising manager of the footwear division, to cultivate the designer shoe salon. Sam Edelman, head of the eponymous New York-based brand, anticipates Kalinsky will help Nordstrom put even greater emphasis on unique fashion and bring in “new blood” that offers the freshest looks.

Of course, beyond the product itself, in-store presentation plays a huge role in the footwear department’s success. Nordstrom’s shoe depart-ments tend to get top billing, located near the front entrance where product can’t be missed. Segal says the area is always clean, while Edelman adds it is well-organized and easy for shoppers to navigate. Throughout the department, product is given space to breathe, and brands tend to be represented with breadth, Tunney says. “[Nordstrom has] the most discerning merchandisers of footwear,” he adds. “They know how to balance space, air and product.”

Specialty-Grade ServiceFootwear-brand execs repeatedly return to Nordstrom’s customer attentiveness when asked what differentiates the chain most. “The ambi-ence works, but it’s the service,” Edelman asserts. Yet Boyd says Nordstrom doesn’t consider itself an expert in this regard. “It’s our No. 1 goal, but

we know we have a lot of work to do to earn our customers’ trust,” he notes. “We strive to offer friendly, knowledgeable, welcoming service and believe expertise in both fit and fashion knowledge is integral to earning our customers’ business and continued confidence.”

Segal notes that if you take a look around a Nordstrom shoe department, you’ll still see sales associates sitting on one knee “the old-fashioned way,” measuring feet and assisting shoppers into shoes. “You can’t put the passion into someone selling something,” he says, but at Nordstrom, he

attests, it shows in everything the staff members do. There are no formal service rules across all Nordstrom stores, Boyd says; the company just looks to hire great sellers who are knowledgeable, friendly and have a vested interest in fashion. “We simply try to provide our employees with the tools they need and empower them to take care of the customer,” he adds.

Tunney recently had the opportunity to put Nordstrom’s staff to the test. In mid-December, he found himself at a Seattle location, where he was working on finalizing the store’s buy for the spring launch of R.G. Barry’s latest licensed label, Superga. Wondering whether the shoe department staff had any knowledge of the Italian canvas sneaker brand, he wandered into the men’s area to find out. The first employee to approach him on the floor had not only heard of Superga (which hasn’t had a pres-ence in the United States for about eight years), but described how hot it currently is over in Europe. “That you don’t get on a typical sales floor,” Tunney says. “The knowledge of Nordstrom’s salespeople is really second to none.”

Brand, style and fitting expertise often comes through extra training from brand reps or in-store designer visits. Nordstrom also ups the service quo-tient by stocking a broader range of sizes than other department stores, notes David Spatz, president of Tiburon, CA-based fashion/comfort brand Anyi Lu International, who says Nordstrom orders down to a women’s size 4 rather than the typical 5.5. The

chain does this by carefully tracking each brand’s sales data and buying accordingly—information it shares with its brands. Spatz notes that analyzing those numbers helps Anyi Lu plan her future collec-tions. “Too often I think vendors throw things over the wall to their stores and don’t get the data back,” he says. “I don’t think other department stores real-ize how valuable it can be.”

Brand ValidatorFor most new brands on the market, getting picked up by Nordstrom gives it weight among the indus-

try. Tunney is excited that Superga is launching in 30 of its stores and would like to see the chain add his Terrasoles brand this year. He notes Nordstrom’s high-end approach and nationwide locations are reasons it has become such a retail force. For a better-grade footwear company, he says, “I don’t know anybody who has a [long-term] successful busi-ness that hasn’t been successful at Nordstrom. If it’s not successful there, you’ll have a hard time any-where else.”

Spatz says Nordstrom picked up Anyi Lu in the brand’s first year, debuting it at its Michigan Avenue store in Chicago, then putting it into four more doors shortly thereafter. In terms of business validation, he says, “I won’t say it equals instant success,

but it’s almost like that.” While Nordstrom initially bought small into the brand, it gave Anyi Lu some freedom in choosing which styles it wanted to put in stores. “It’s much more of a partnership than what we see from most of our retailers,” Spatz says. “But obviously, if the shoes don’t sell it will end.”

Edelman echoes that statement: “Nordstrom is usually the first to recognize true leadership and direction in fashion, but then they ask for a part-nership,” he says. “It takes maturity, insight and integrity to develop that relationship.”

Morse also notes being carried by Nordstrom helps validate a brand, but being picked up by its stores means a manufacturer must deliver. “They make sure their vendors deliver a real value to their customers,” she says. “They were the first to take a risk with our [line], but at the same time it was a calculated risk. Never forget that they are merchants, and they demand that we do what we do better than we would do it independently. They raise the bar for us.” Morse says since Nordstrom initially picked up her brand, her company has had to continually work to improve its product and internal operations to maintain the relationship. Once Nordstrom buys in, she notes, “You’re play-ing in a big man’s field; there’s no luxury of making mistakes or not rising to the occasion.” Yet Morse affirms this has only made Farylrobin a better com-pany. “Our goal is to make [Nordstrom] a better organization, but the reality is they require that we become a better organization.” •

Nordstrom’s designer footwear salon